Residential Real Estate News
U.S. Housing Inventory Drops to Lowest Levels Since 1999, Says NAR
One-Third of Realtors Say Lack of Inventory Stopped Clients from Buying Homes
According to the National Association of Realtors newly released 2023 Member Profile, amid a significant shortage of housing supply in 2022, 32% of Realtors named a lack of inventory as the most important factor limiting potential clients from making a purchase. This annual report analyzes members' business activity and demographics from the prior year. Housing inventory fell to the lowest level recorded since 1999 as home buyers entered the market at a frenzied pace to lock in historically-low interest rates.
"The report's findings clearly show that the lack of housing inventory is impacting Realtors' ability to find buyers a home," said Jessica Lautz, NAR deputy chief economist and vice president of research. "Housing inventory and affordability continue to be the top obstacles that hold back potential clients in the housing market."
Business Characteristics of Realtors
Nearly two out of three Realtors - 64% - hold sales agent licenses, while 20% hold broker licenses and 18% hold broker associate licenses. Seventy percent of members specialize in residential brokerage. Like in 2021, relocation, residential property management and commercial brokerage are members' most common secondary specialty areas.
Members typically have 11 years of real estate experience, up from eight years in 2021. Those surveyed with two years or less experience declined to 17% in 2022, down from 25% in 2021, while those with 16 years or more experience increased to 42% in 2022, up from 39% in 2021. Like in recent surveys, more than three-quarters of members - 76% - are certain they will remain in the real estate industry for at least two more years.
Business Activity of Realtors
The typical NAR member had a higher sales volume ($3.4 million vs. $2.6 million) and the same number of transactions (12) in 2022 compared to 2021.
The typical Realtor earned 27% of their business from previous clients and customers, an increase from 16% last year. The most experienced members - those with 16 or more years of experience - reported a greater share of repeat business from clients or referrals (a median of 43% in 2022 vs. a median of 44% in 2021). Similar to 2021, members with two years of experience or less reported no repeat business in 2022. Overall, Realtors earned a median of 24% of their business from referrals, an increase from 20% in 2021. Referrals were also more common among members with more experience, with a median of 30% for those with 16 or more years of experience (vs. 31% in 2021) compared to 4% for those with two years or less of experience (vs. 0% in 2021).
Income and Expenses of Realtors
The median gross income for Realtors increased to $56,400 in 2022, up from $54,300 in 2021. Realtors with 16 years or more experience had a median gross income of $80,700, down from $85,000 in 2021. Realtors with two years or less experience had a median gross income of $9,600, an increase from $8,800 in 2021. Higher inflation impacted Realtors last year as total expenses increased to $8,210 in 2022 from $6,250 in 2021.
Office and Firm Affiliation of Realtors
A majority of Realtors - 55% - worked with an independent company and 89% were independent contractors at their firms - both figures nearly identical to 2021. Forty-three percent of members worked at a firm with one office and nearly one-quarter (24%) worked at a firm with two to four offices. The typical Realtor had a median tenure of six years with their current firm, up from a median of five years in 2021. Twenty-six percent of members reported working for a firm that was bought or merged in the past two years, up from 8% in 2021. Like in 2021, errors and omissions insurance was the most common benefit provided by members' firms in 2022.
Technology and Realtors
Daily, the strong majority of Realtors use a smartphone with wireless email and internet capability (95%) and a laptop or desktop computer (90%). The smartphone features that members use most frequently on a daily basis are email (93%), GPS apps (48%) and social media (46%). Text messaging (94%) is the top method of communication for members with their clients, followed by phone calls (92%) and email (90%) - all the same as last year. Two-thirds of members - 66% - have their own website. Seven percent of Realtors use drones themselves as part of their business, and 43% have hired a professional drone operator. Four percent and 1% of members, respectively, use 3D/virtual tour and virtual staging technology daily.
"Despite the changing market conditions that Realtors faced throughout 2022, members rose to the challenge by embracing new technology to help buyers find their homes and sellers to market their properties," Lautz said.
Demographic Characteristics of Realtors
Eighty-one percent of Realtors were White in 2022, up from 77% in 2021. Hispanics/Latinos accounted for 10% of Realtors, followed by Black/African Americans and Asian/Pacific Islanders - both at 5%. When compared to more experienced members, new Realtors tended to be more diverse. Among those who had two years or less of experience, 41% were racial minorities in 2022, an increase from 37% one year ago.
Sixty-two percent of all Realtors were female in 2022, down from 66% in 2021. The median age of Realtors was 60, up from 56 from the previous year. Just over half of members - 52% - were over 60 years old and 1% were under the age of 30.
Overall, the education level among Realtors exceeded that of the general public. Ninety-one percent of members had some post-secondary education, with 31% completing a bachelor's degree as their highest level of educational attainment.
Two-thirds of members - 66% - reported volunteering in their community. Volunteering was most common among members aged 40 to 49 years.
